1987 (1) TMI 219 - AT - Customs

Summary

Issues:
1. Duty demand on stolen goods.
2. Confiscation of unaccounted nylon yarn.
3. Requirement of filing classification list before manufacture or clearance.

Analysis:
1. The case involved an appeal by the Collector of Central Excise against the order of the Collector of Central Excise (Appeals) regarding duty demand on stolen goods. The respondents claimed that 130 kg of nylon yarn was stolen from their factory and 28 kg was found unaccounted for. The Collector (Appeals) set aside the duty demand on the stolen yarn and reduced the penalty. The issue was whether duty could be demanded for stolen goods. The Tribunal held that duty must be paid unless goods are lost or destroyed by natural causes, not theft. The law does not provide for remission of duty for stolen goods. The liability to pay duty rests on the manufacturer, even if goods are stolen, without any provision for relief.

2. The next issue was the confiscation of 28 kg of nylon yarn found unaccounted for. The Assistant Collector confiscated it as the respondents had not maintained proper records and not filed a classification list. The Tribunal observed that the confiscation was not justified solely based on lack of entry in records. The relevant rule, Rule 173B, did not specify the time for filing the classification list. It was noted that a fresh classification list could be filed when manufacturing a new product. The failure to file the list did not warrant penal consequences under the Central Excise Act and Rules. Therefore, the order of the Collector (Appeals) regarding the redemption fine was upheld.

3. Lastly, the issue of when the classification list should be filed, before manufacture or clearance, was addressed. The Tribunal clarified that the list primarily pertains to clearance of goods, and obtaining a Central Excise license is necessary for production or manufacture. Filing the classification list is crucial for duty quantification during clearance, not before manufacturing. Thus, the failure to file the list before manufacturing did not have penal consequences. The appeal was partially allowed, and since no cross-objection was filed regarding the penalty, the penalty order passed by the Collector (Appeals) remained in force.